Ruth Handler And Her Barbie Refashioned Mattel And The Toy Industry

In 2009, 50 of fashion's leading designers created the hottest ticket of New York City's Fashion Week. The show celebrated a beloved muse on her 50th birthday: The Barbie doll. Barbie debuted in 1959 and "perseveres today as a cultural icon ... her enchanting essence has allowed generations of women to enter a world of make-believe that knows no boundaries," said Vera Wang in InStyle magazine.

Barbie is the product of the make-believe and boundless marketing acumen of Ruth Handler, who co-founded Mattel (MAT) with her husband Elliot Handler and Harold Matson in a Los Angeles garage in 1945. Today, Mattel is the world's largest toy manufacturer with sales in 150 countries and annual revenues of over $6 billion. Elliot Handler created many of Mattel's early successes, and Ruth's marketing genius brought them to the masses.

Ruth Handler marketed the original Barbie doll as a "teenage fashion model." (AP)

Handler was born in Denver in 1916, the tenth child of Jewish immigrants who fled anti-Semitism in Poland. After her mother became ill, infant Ruth went to live with her eldest sister, Sarah, and her husband, Louie Greenwald, hardworking small-business owners who owned a pharmacy, lunch stand and one of Denver's first post-prohibition liquor stores.

Handler had a more affluent upbringing than her siblings, whose home was plagued by their father's gambling debts. But hers wasn't a life of leisure; Ruth began working in the Greenwald businesses as soon as she could.

In addition to her job at the lunch stand and classes at the University of Denver, 18-year-old Ruth was occupied with Elliot Handler, a young artist she met at a dance. Wanting to see the world, however, she accepted a girlfriend's offer to explore Los Angeles. Elliot saved up money to attend Los Angeles' Art Center College of Design and soon joined Ruth, who worked in the stenography pool at Paramount Studios. They married in 1938.

Mattel Is Born

While Ruth continued at Paramount, Elliot began making a name for himself as a designer of costume jewelry. She often made sales calls for him on her lunch hour. In 1941, she gave birth to a daughter named — you guessed it — Barbara. While a reluctant homemaker, she then had a son — yes, Kenneth — in 1944.

In 1945, Elliot and colleague Harold Matson founded Mattel. Ruth, itching to get back in business, suggested they make picture frames, convinced that she could get a local photo studio to place a large order. She was right. Mattel soon outgrew the garage.

Mattel had its first hit toy in 1947 with the Uke-A-Doodle, a miniature ukulele, and the Handlers bought out Matson. They had their next hit in 1950 with a hand-cranked low-cost music box inserted into several toys, including the jack-in-the-box.

By 1951, Mattel had 600 employees. Ruth, as executive vice president, handled marketing and operations. "(Ruth) was very hands-on. She was on the floor doing quality control. She and Elliot had an open hiring policy. She hired for talent," Robin Gerber, author of "Barbie and Ruth," told IBD. Their factories employed far more women and people of color than the norms of the day, and in 1951 Mattel earned the Urban League Award for nondiscriminatory hiring practices.

In 1955, ABC announced the "Mickey Mouse Club" series. Ruth knew instinctively that kids watching other kids play with Mattel toys would be a game-changer. She bet the farm, paying $500,000 for a sponsorship, nearly all of Mattel's net worth. The gamble paid off, and sales of the featured Burp Gun broke records. Mattel's investment in television ads changed the key toy consumer from parent to child and created a year-round demand for toys, a business which had always been seasonal.

Barbie And The Midas Touch

On a trip to Switzerland in 1956, Ruth spotted the popular "Lilli" doll, based on a racy cartoon character in a German newspaper, which had adult features and fashionable outfits, and was marketed to adults as a gag gift. Since the early 1950s, when she observed young Barbara rejecting the child paper dolls in favor of adult ones, Handler had been trying to convince her team that a doll with adult features would be a hit. They nixed it, saying it would be too expensive to manufacture. But in her autobiography "Dream Doll," Ruth wrote that the reluctance "stemmed mostly from the fact that the doll would have breasts."

Seeing Lilli changed the team's tune. Handler hired marketing psychologist Ernst Dichter to explore whether Barbie's breasts would turn off parents. His advice, after conducting interviews with girls and their mothers? Make them bigger.

Barbie debuted in 1959. Handler marketed Barbie as a "teenage fashion model" and created a commercial displaying her many different looks. Sales started slow, but once school got out, Barbie flew off the shelves. It took Mattel three years to catch up with consumer demand.

In 1960, Mattel went public. In the following years it introduced other iconic toys including Chatty Cathy and Hot Wheels cars. By 1966, Mattel had reached $100 million in sales and was listed on the Fortune 500.

By the late 1960s, Mattel's annual sales were over $200 million and its stock offered a 16% return. Mattel implemented a growth strategy of acquiring other companies aimed at youngsters and made a splash by purchasing Ringling Brothers Circus. But sales sagged in the economic recession — compounded by a fire in a Mexican factory that destroyed inventory and a dock workers' strike that halted deliveries. Handler had other battles to fight, though, as she was diagnosed with breast cancer in 1970.

Upon returning to work after her mastectomy, she discovered that Mattel was implementing "bill-and-hold," a practice of recording sales to be shipped later, in order to maintain its stock price. Bill-and-hold was legal. However, the extent to which Mattel used it meant that it submitted false and misleading information in its financial reports. Handler claimed that she didn't know the full extent of the practice, but many were skeptical that her eye for detail could miss the discrepancies.

In 1972, shareholders sued Mattel. In 1974, the SEC began investigating, and she and Elliot left the company. What had led to her recklessness? In an interview with Robin Gerber, Elliot said that with her preternatural drive, Ruth "couldn't turn it off."

Fortunately for many breast cancer survivors, she didn't turn it off. Unhappy with her awkward prosthetic breast, a friend suggested that she visit sculptor Peyton Massey. With her input, he designed one superior to those she'd worn before. They created Nearly Me, a reasonably-priced, natural-feeling line of prosthetics fitted to women's bra sizes. Nearly Me launched in 1976 in high-end department stores. Letters of gratitude poured in, including one from Betty Ford.

But on Feb. 17, 1978, Handler was indicted on 10 counts of mail fraud and making false statements to the SEC and federally insured banks. Convicted, Judge Robert Takasugi fined her $57,000 and gave her a sentence of 500 hours of community service for five years. Handler's probation officer assigned her to help create Foundation for People, which helped young disadvantaged young men with job training.

Rising Again

Nearly Me continued its success in the 1980s. In 1989, she and Elliot were inducted into the Toy Industry Hall of Fame. The same year, her poor health convinced her to sell Nearly Me to Spenco Medical.

Handler faced her greatest loss, however, in 1994, when her son Kenneth died of AIDS. But Barbie would help bring her out of her grief and return her to the spotlight. When Kenneth told Elliot and Ruth of his disease two years earlier, the Handlers sprang into action. helping with research and care, but his decline was rapid.

A surprise visit from her past creation — Barbie — brought Handler unexpected attention and satisfaction in the midst of her mourning. Mattel Executive Jill Barad had created the "We Girls Can Do Anything" campaign that capitalized on Barbie's professional achievements. "Barbie was able to step into the shoes of so many women's careers before they could. There was astronaut Barbie long before there was a real (female astronaut). That's something Ruth should be proud of," Tanya Lee Stone, author of "The Good, the Bad, and the Barbie" told IBD. In 1994, Barad asked Handler to travel with her, publicizing Barbie's role as a working woman.

After years of failing health, Ruth died on April 27, 2002. She spent her final years advocating for breast cancer survivors and examining the ups and downs of her extraordinary career. In the closing lines of "Dream Doll" she wrote, "Even now, at 77, I can say that whatever has driven me for all these years is driving me still, even if at a slower pace. There's still a lot of fight in me, and perhaps the fight's the thing."

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